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A man pays 40 times the annual rent to purchase a building. The rate % per annum he derives from his investment is

Solution

✅ Correct Option: 1

Let the annual rent be RR

Purchase price = 40R40R

Rate of return = Annual ReturnInvestment×100%\frac{\text{Annual Return}}{\text{Investment}} × 100\%

=R40R×100%= \frac{R}{40R} × 100\%

=140×100%= \frac{1}{40} × 100\%

=2.50%= 2.50\%

Therefore, the rate of return is 2.50% per annum.

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